Posted on August 20, 2010, by mgeedey in threats to Internet Radio.

Just as we’ve all come to love Internet radio and struggle to imagine music before this came to be, a recent legislative decision could jeopardize the entire system. Traditionally, as payment for streaming music, Internet radio webcasters were required to pay an annual fee along with a certain percentage of profits. However, performers who are suffering from lost revenues have been pushing hard for a pay per performance fee. Before the change in legislation, money was paid to songwriters and performers received royalties, but rough times in the recording business are causing a push for this new system. What recording artists seem to forget is that it’s illegal downloads that are causing their wallets to shrink, not legal, license-holding radio stations. In fact, we’ve all seen better days. The new fee system requires a flat fee per song that is played. However, since this change in 2007, the rate has gone up every year.This year the fee is .0019 per performance. At first glance this number seems microscopic. But unlike AM and FM radio broadcasters who play one song for thousands of listeners to hear, Internet radio lets each user create their own station and stream songs at their own pace. Translation: Internet radio webcasters are paying a lot more money. Not only does this pose a threat to the survival of many of the smaller sized Internet radio stations, the ones who manage to survive may have to begin limiting the number of songs you can listen to. Another negative effect this is having on online radio stations is a bombardment of advertising. Though it may be hard to remember, there was a time when your Pandora station was never interrupted by an audio advertisement. We’ve also become accustomed to having our music stopped every so often with the banner that asks if you’re still listening. Why? Because, just like it says, these companies have to pay for every song that they play.We won’t deny for a minute that recording artists have taken a huge hit as a result of the Internet with illegal downloads and file sharing. But, don’t bite the hand that feeds you.



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